12.15pm GMT

Siemens to shed 6,800 SEN jobs

Siemens, Germany's biggest technology group, said today it will shed 6,800 jobs at its corporate telecoms business, SEN, and is seeking an industrial partner or financial investor to take over the loss-making unit.

Joe Kaeser, chief financial officer, said in Munich that the moves underline the dramatic shift from hardware to software in the telecoms market, especially the rapid change to internet-based telephony.

Siemens has been trying to offload SEN, which lost €602m (£455m) last year, for some time as part of its overall restructuring into a global business focused on industry, energy and healthcare.

The group, which merged its loss-making telecoms equipment business with Nokia in 2006 and disastrously sold off its mobile handset business to Taiwan's BenQ, has been linked with selling SEN to rivals Nortel or Alcatel-Lucent or financial investor Cerberus.

Kaeser refused to comment on likely partners at a hastily-arranged oppress conference but said any financial investor would have to be well-funded, technologically savvy and in for the longer term.

"Buying it at a cheap price and selling at a high price is no longer in," he said in an obvious sideswipe at private equity groups and hedge funds. "We don't want any adventures," he added in the wake of the BenQ experience which saw the Taiwanese firm close down German plants after taking over the mobile business.

Siemens said it would cut 3,800 jobs worldwide, including 2,000 in Germany, and sell-offs or partnerships would see a further 3,000 personnel affected, including 1,200 in Germany. The cuts would slash SEN's global workforce by 40% from 17,600 to 11,800 by the end of next year.

Kaeser insisted that Siemens would not enforce any redundancies until late 2009 and said the group itself had 3,300 internal vacancies, with a further 4,000 on offer in external companies.

He said the aim was to transform the unit from the current number four to number two, behind US group Cisco which dominates the market, but Siemens's ultimate aim was to withdraw from the business completely.